💰 Mercado Libre secures $250M for expansion
Mercado Libre has obtained $250M in financing from JPMorgan. This funding will be used to grow its FinTech arm, Mercado Pago, in Mexico, particularly targeting small and medium-sized businesses (SMBs). The funding supports the expansion of Mercado Pago's services, which already doubled the number of mobile credit card readers in the country over the past year. The company also aims to increase its loan portfolio, which stood at $1.5B by the end of Q2 2024.
🇲🇽 Mexico's role in Mercado Libre's strategy
Mexico has become a crucial market for Mercado Libre. The country accounted for over 20% of the company’s total revenue in 2023, a significant increase from 12% in 2019. Mercado Libre’s focus on Mexico is part of a broader strategy to expand its presence across Latin America. The company is also pursuing a banking license in Mexico, which would allow it to offer a full range of financial services, including savings accounts, commercial loans, and mortgages.
🚀 Investment and growth plans
Mercado Libre’s investment in Mexico is expected to reach $2.5B in 2024, a substantial increase from the $1.6B spent in 2023. This investment will cover various areas, including warehouse expansion, logistics, loan increases, salary payments, and technology. The company’s success in Mexico and Brazil has been a key driver of its overall growth, with Mexico’s gross merchandise volume (GMV) rising by 28% year-over-year in the first quarter of 2024.
🌎 Expansion across Latin America
Beyond Mexico, Mercado Libre has ambitious plans for the rest of Latin America. The company is expanding in Chile and has plans for Colombia, Peru, and Uruguay. “The way we realize it works is basically pick one of these countries and launch the full suite of products there,” said Osvaldo Giménez, President-Fintech, Mercado Libre, and CEO of Mercado Pago. The company’s goal is to become the largest digital bank in the region, leveraging its growing presence in key markets like Mexico and Brazil.
Can Mercado Libre dominate Mexico’s banking sector?
